CEE region piloted Europe's strong hotel performance in October

Westin Warsaw
Westin Warsaw, Poland

Thanks to hotels in Central and Eastern Europe, the region saw significant GOPPAR year-to-date 2017 growth. In response, the continually high GOPPAR levels have set the tone for Europe's ongoing positive performance levels so far, according to HotStats.

Achieved average room rate, which increased again by 4.8 percent YOY to €165.28 in October 2017, boosted both RevPAR and room occupancy growth. However, the rise in room occupancy was minor by only 0.5 percentage points to 76.6 percent for the month. The region's occupancy and achieved average room rate drove RevPAR up by 5.5 percent to €126.61 as non-rooms revenue growth, including food and beverage by 3.7 percent and conference and banqueting by 6.4 percent, continued driving TrevPAR increases for the year by 5.0 percent to €192.60. A reduction in costs, which included a 0.3-percent saving in payroll to 30.4 percent of total revenue, also drove TrevPAR levels up. In response, the payroll saving helped European hotels gain a 7.2-percent increase in GOPPAR to €75.58, which is equivalent to a 39.2-percent profit conversion of total revenue.

Commercial segment rates for hotels across Europe, which included YOY increases in the residential conference sector by 2.3 percent and the corporate sector by 8.0 percent, proved confidence in the business segment remains strong. Meanwhile, growth in individual leisure rates by 12.0 percent and group leisure rates by 12.1 percent shows the current force of the tourism industry across the region. “According to the European commission president, Jean-Claude Juncker, the benefits of structural reform implemented in the wake of the global financial crisis are finally coming to fruition. Europe’s economy is now booming, fueling business and leisure tourism across the region and this is great news for hoteliers. While Juncker has cited the EU’s newfound unity after Britain’s vote to leave as being a catalyst for the economic recovery, it is more likely due to the stand out performance of countries in the CEE, which is reflected in the health of their hotel industry,” Pablo Alonso, CEO of HotStats, said in a statement.


A 3.8-percent rise in occupancy to 89.0 percent along with a 6.3-percent increase in achieved average room rate to €114.04 fueled the 11.1-percent YOY rise in RevPAR to €101.51 this month in Prague's hotels. The growth in rooms revenue this month combined with increases in other revenue allowed TrevPAR levels to rise by 10.7 percent to €155.46. Despite the 0.1-percent increase in payroll to 19.4 percent of total revenue, hotels in the Czech Republic's capital saw GOPPAR levels rise by 13.5 percent to €79.97, which is equivalent to a profit conversion of 47.7 percent of total revenue. “Economic growth in the Czech Republic is expected to reach 4.3 percent in 2017, up from 2.4 percent in 2016. Furthermore, according to Prague City Tourism, for the year to September 2017, the number of overnight stays at hotels in Prague increased by 7.2 percent year-on-year. While the increase in international visitors was recorded at +6.8 percent, domestic visitation was up by +11.1 percent, illustrating the high disposable income levels and propensity to travel of the Czech population, which, again, is extremely positive for Prague hotels,” Alonso added.


Key events at the Warsaw Expo allowed the city's hotels to record strong top and bottom line performance. These included the approximately 160,000 attendees at the Warsaw Moto Show and more than 45,600 attendees at the World Travel Show. The high demand levels drove achieved average room rate at the Polish capital's hotels soaring by 11.5 percent to €118.90, offsetting the 0.7-percent drop in room occupancy to 81.4 percent. Warsaw's rooms revenue increase by 10.6-percent YOY to €96.81 led to the 9.6-percent increase in TrevPAR levels to €146.98. Similar to the payroll totals at hotels in Prague, which record some of the lowest labor levels of all European hotel markets, payroll saw a 1.2-percent decline at Warsaw's hotels to 20.8 percent of total revenue. The 13.3-percent YOY growth in profit per room to €71.74 in October fueled the 9.9-percent year-to-date increase in GOPPAR, setting up hotels in Warsaw for another great year of bottom line growth in 2017 following the rises in 2015 by 5.4 percent and 2016 by 11.7 percent.